What Every Importer Should Know About the Tariff Refund Process in 2025

Tariffs have become a significant cost factor for US importers in recent years. From punitive trade-war levies to routine customs duties, these charges can easily add up to millions of dollars. The good news is that tariffs are not always a one-way payment. Under the right circumstances, importers can get some of that money back. In fact, US companies pay over $100 billion in import duties each year, yet only a small fraction is ever reclaimed, leaving an estimated $50 billion in eligible duty refunds unclaimed annually. Many importers are potentially leaving money on the table, underscoring why it’s so important to understand the tariff refund process.

Are Tariffs Refundable for US Importers in 2025?

Yes: in many cases US importers can get refunds on tariffs, but it’s not automatic or universal. Whether or not a tariff is refundable depends on the context and programs available. One major avenue is the duty drawback program, which allows companies to recover up to 99% of the import duties they paid as long as the goods are later exported or used in making exported products. Customs duties can also be refundable if, for instance, you imported goods and then re-exported them, or if you overpaid due to a classification error or missed trade agreement benefit.

It’s important to note that refunds won’t happen automatically just because a tariff policy changes or expires. Importers must actively apply for refunds through US Customs and Border Protection (CBP) procedures. In 2025, this issue is especially topical as thousands of importers have been seeking refunds on certain Trump-era tariffs through lawsuits and administrative claims. The US government acknowledged the possibility of massive refunds: the Treasury Secretary indicated that if certain contested tariffs were struck down by the courts, roughly half of the tariff revenue might have to be paid back, potentially tens of billions of dollars in refunds. That scenario is still playing out, but the bottom line is that tariffs are not necessarily a permanent expense. With knowledge and effort, importers have opportunities to recoup some of those costs.

Understanding How Tariff Refunds Work and Who Qualifies

Refunds go to the importer of record, or the party that paid the duty. There are two main routes:

• Post-Summary Correction (PSC): After goods enter the US, there is a period (often about 300 days from entry) called the liquidation period during which you can amend the entry documentation. If you realize you overpaid duties (perhaps due to a misclassification or an overlooked exemption), you can file a PSC to correct the entry before it’s finalized (“liquidated”) by customs. CBP will review the correction, and if they agree, they’ll adjust the duty and issue a refund for the difference. This is a common method for routine corrections, and it keeps the process relatively straightforward since the entry is still open for adjustment.

• Post-Liquidation Protest: If the entry has already liquidated (i.e. CBP has finalized the duty assessment, which usually happens after that initial period), you can no longer do a simple correction and must instead file a formal protest. A protest is essentially an appeal to CBP, arguing that they should refund duties because something was wrong with the original assessment (for example, the goods should have qualified for a lower tariff rate under a trade agreement, or an exclusion applies). There is a strict deadline for protests: you must file within 180 days of the entry’s liquidation (roughly six months after finalization).

Supporting documents (entry summaries, invoices, rulings, etc.) are required to justify the refund. Not all tariffs are refundable: anti-dumping or countervailing duties are typically excluded.

How to Apply for a Section 301 Tariff Refund 

Section 301 tariffs (the extra duties on imports from China and other countries imposed for trade enforcement) have been a huge burden on many importers since 2018. But these are three main refund pathways:

• Duty Drawback: If you exported the goods or used them in exported products, you can reclaim 99% of those duties. Substitution drawback is allowed with commercially interchangeable goods.

• Exclusions: If your goods fell under an exclusion during import, you may file a PSC or protest to recover the paid duties.

• Litigation: Thousands of companies have filed lawsuits, arguing that List 3 and 4A tariffs exceeded USTR authority. The case, currently before the Supreme Court, could result in billions in refunds if the tariffs are struck down. However, importers must have preserved their claims by filing timely protests or joining litigation.

Drawback claims require extensive documentation (matched import/export records) and must be filed within 5 years. Also keep in mind that exclusion refunds hinge on proper HTS classification and meeting filing deadlines.

How to Claim a Customs Duty Refund After Importing Goods

Not every refund situation involves special tariffs like Section 301. Often, importers discover more routine reasons that they overpaid duties on a shipment. Perhaps your customs broker classified a product under the wrong Harmonized Tariff Schedule (HTS) code, resulting in a 10% duty rate when a correct classification would be duty-free. Or maybe you imported something from a country with a Free Trade Agreement but didn’t have the paperwork at the time of entry, so you paid full duties that you shouldn’t have. In such cases, you’ll want to claim a customs duty refund for those past imports.

The general process to claim a refund on imported goods goes like this:

• Identify the overpayment: Review your import entries and determine where you paid more tariff than necessary. Many overpayments are found months or weeks after import, so it’s good practice for companies to do periodic post-entry audits.

• Choose the correct filing method: As discussed earlier, decide whether a Post-Summary Correction or a protest is appropriate based on the timing. If the entry is still within the liquidation period (generally within about 10 months of entry, unless extended), file a PSC via the ACE portal to amend the entry. If the entry is already liquidated (finalized), prepare a protest (CBP Form 19) and submit it within the 180-day window. In both cases, clearly state the reason for the refund and the correct duty that should apply.

• Provide supporting documents: This could include invoices, packing lists, product literature, FTA certificates of origin, classification rulings or explanatory notes, etc. 

• Submit to CBP and monitor: File the PSC electronically or send the protest to the appropriate CBP center (protests can also be filed electronically now through the e-Allegations/protest system in ACE). Once submitted, CBP will review the claim. If CBP agrees with your claim, they will approve the refund. If you don’t hear back or see the refund in a reasonable time, follow up with CBP. Occasionally refunds can be held up if there are outstanding compliance issues or if CBP wants more information. In some cases, CBP might partially approve a claim or deny it. If that happens, you can further appeal (e.g., take a protest denial to court) if the amount justifies it.

Two critical reminders when seeking any duty refund: act within the permitted time frame, and ensure your paperwork is correct. If you miss deadlines or if your submission is sloppy, your refund request will likely be denied.

When and How Importers Receive a Tariff Refund Check

Despite the term “refund check,” most refunds are paid electronically via ACH. After approval, funds typically arrive within weeks (faster for PSCs, slower for protests or drawback claims). If the Supreme Court rules against the tariffs, refund volume could surge, delaying processing times.

Importers should monitor ACE for updates and make sure banking info is up to date. Refunds may be delayed, but they won’t be forgotten.

Will Tariffs Be Refunded Under the Latest US Trade Policies?

As of 2025, US trade policy is at a crossroads. Importers are keenly watching whether recent changes in policy or law will lead to broad tariff refunds. One major development has been the legal challenge to tariffs imposed under the previous administration. In late 2025, the US Supreme Court heard arguments on the lawfulness of certain tariffs implemented via the president’s emergency economic powers. This case is a big deal: if the Court ultimately rules those tariffs were unconstitutional or otherwise improper, it could potentially force the government to stop collecting them (going forward) and possibly refund huge sums that were collected over the past couple of years.

The White House, for its part, has signaled that it would comply with any court decision. That said, as of the time of writing, the tariffs in question (including certain IEEPA-based tariffs and the big Section 301 China tariffs) remain in effect. There hasn’t been a policy decision to voluntarily refund or cancel them entirely. For example, the Section 301 China tariffs are undergoing a statutory review, but no major rollback has occurred yet. Instead, what we’ve seen are adjustments: the USTR has extended some temporary exclusions to help with supply chain issues, and there have been negotiations with China that paused additional tariff hikes and even reduced a subset of tariffs (like the so-called fentanyl-related tariff) by 10%.

When those reductions happen, importers benefit going forward, and if any duties were overpaid during a brief period before the change, CBP has mechanisms to refund the difference (as happened earlier in 2025 when a tariff rate was lowered mid-year and refunds were allowed for the overpaid portion).

One cautionary note: even if some tariffs do get lifted or refunded, new trade measures could replace them. So it’s wise for companies to treat tariff management as an ongoing strategic task, something that requires constant attention, rather than a one-time win or lose situation.

Common Reasons Tariff Refund Requests Get Rejected

Not every refund application ends happily. Here are some of the top reasons tariff refund requests get denied:

• Missed deadlines: PSCs and protests have strict cutoffs.

• Missing documentation: CBP needs proof.

• Ineligibility: Not all duties are refundable.

• Procedural errors: Filing in the wrong place or format.

• Wrong claimant: Only the importer of record may claim.

Poor record-keeping and confusion over program rules are common pitfalls. Refund success depends on precision, timing, and properly understanding how the process works.

How AI and Automation Help Simplify the Tariff Refund Process

Given the complexity we’ve described, importers are turning to automation and AI tools, like Gaia’s Tariff Discovery Engine, to streamline tariff compliance and refund claims. These tools can scan massive data sets, identify refund opportunities, and validate your eligibility for them, on top of helping you catch classification errors and stay up-to-date on policy changes. Tech-enabled teams are far more likely to file timely, successful claims, and uncover refunds that would’ve been missed.

Conclusion

Tariffs can drain your budget, but with planning and execution, many are recoverable. In 2025, whether through exclusions, drawback, protests, or future litigation, importers have real paths to reclaim what’s theirs. Stay informed, meet deadlines, and leverage technology. Don’t let refundable duties go unclaimed.